Summary

Online sales is a great example of the company's know-how when it comes to selling apparel och accessories.

Summing up.

Macro

Oil price

As pointed out in the latest reports from Stage Stores Inc. The company's stores placed in the energy-depending-regions(Texas, Oklahoma etc.) has been suffering from low sales.

This group of stores have played an important roll in SSI's overall results earlier years, and have been a strong contributor to the historically stable business this 850 strong chain of stores has represented.

Since the price of oil touched rock bottom in February 2016 after a dramatic fall staring in July 2014, the employment in the oil industry has been at a minimum in the "energy-districs".

The unemployment in the society's depending on the oil- and gas industry has reached leveled up in the same pace the price of oil and gas has fallen. I guess you could say that Stage's customers been affected with a pretty big confidence-bubble-burst.

Now however, the prices of WTI-oil has risen from the dead to a much more normalized level, which suddenly makes pumping oil in Texas a profitable business again.

Giving that the industry is hiring again, and has been doing so for the latest six months give or take.

This should give Stage's customers the recovery in cash and confidence they need to drive down to the mall and lay there hands on some new apparel, cosmetics and all the other nice products you'll find in a Stage Store.

Peso vs. Dollar

SSI's reports also claims that a weak price of the Peso has had an impact of sales in stores located along the Mexican border.

It wouldn't be fair to say that the price of Mexican Peso have had the same strong comeback as the price of WTI-oil has enjoyed. But at least it's tending upwards an has accumulated a nearly 12% increase against the US Dollar during the last 12 months.

So far the Peso would not likely to give the tailwind as it used to give the SSI stock. But at least its not giving the the stores as much headwind as it has before.

If the US Dollar would come down even further against the Mexican Peso, it should however be a potential catalyst for an increase in purchasing power with the costumers to the border-located stores of Stage.

Stage's sales

Flattening trend

Judging from the reports and news that SSI has publicized in the last 12 months it's negative trend in sales has come to a halt, and instead reached some kind of plateau.

Sales are even tending to slowly change to positive; some of 2017's months have showed positive y/y comparable sales. The latest news, telling us about a stronger semester period, during the second half of December is also an encouraging fact that strengthens the forecast of Stage's performance.

Online sales

The brightest shining star of Stage's sales channels so far is however the online store.

It seems that as long as you know what you're doing when selling apparel it doesn't matter on which platform you operate.

Even if Stage in many eyes where way to late when launching it's online store, it has gained in size with double digits every quarter since launch date.

There are no doubts that Amazon and other giants know how to tackle the apparel market, but Stage Stores has really shown that they also qualify in the same branch.

Gordmans

The acusition of 50 Gordmans stores in the fist half of last year could be a nice strategic move.

This complement to Stage's existing fauna of another 800 stores should boost the overall sales when the market is strengthening and help the chain reach profitability even earlier.

Summing up

The forecast for Stage Stores Inc. looks much brighter than it did just 6 months ago.

Rearing prices of oil and gas gives the right conditions for a stable growth in sales. This should help the chain get back to its former earnings sooner than anyone could have hoped for in mid summer 2017.

With the pace online sales keeps gaining momentum, it will soon be the a strong contributor to the company's financial results, and also the costumer experience giving easy access to SSI's nice offers.

Apologies for spelling

I'm sorry for any misspelling and weird writing in general. Blaming it on my Swedish citizenship.